An exploratory analysis of B2B price changes

This study is a step toward understanding price changes and the outcome of pricing processes in an environment where sales people have pricing authority. We explore the effect of observable and quantifiable factors on business-to-business price changes using a large data set from a grocery products distributor. We study the relationship between price changes and cost-, customer-, sales people- and product-related factors as well as centralized pricing recommendations provided to sales people. We gauge the importance of each factor for each stage by building a series of statistical models. We then determine the model with least number of variables and highest explanatory power. We show that price changes occur infrequently but, when they occur, they exhibit asymmetry.

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